Dec 15, 2021 – At the time of publication, the silver/gold ratio reached just over 80:1. That translates to mean that it requires a more than 80 ounces of silver to buy an ounce of gold. For most of modern history this ration has moved between 40:1 and 50:1. Therefore, at this juncture, silver looks to be extremely undervalues in comparison to gold. Anticipating an eventual closing of the gap, many investors see a possible opportunity in the making.
In the recent past, with the onset of the pandemic, the ratio rocketed to over 100:1. The subsequent slashing of rates and massive money printing by the Fed caused gold and silver to rally. This big move up propelled both gold and silver, but silver experienced a much larger price gain, closing the gap from over 100:1 to approximately 64:1. Traders and investors are evaluating the current scenario for the possibility of a similar opportunity.
The Fed is scheduled to make a policy announcement this afternoon. The details as to their course of action are likely to either exacerbate the gap or trigger it’s closing.